Crude Oil, Gold Prices Edge Up As Market Turmoil Cools. Now What?

Commodity prices corrected broadly higher amid a recovery in risk appetite, as expected. Crude oil and gold prices rose in tandem following news that China’s Vice Commerce Minister will travel to the US to restart talks following a round of tit-for-tat tariff hikes, cooling worries about further trade war escalation.

That lifted the spirits of investors previously battered by emerging market jitters triggered by rapid deterioration in US relations with Turkey. Raw materials prices slid amid broad-based de-risking across financial markets. Hopes for US/China breakthrough allowed for a partial retracement of those moves.

API BULLETIN, US CONSUMER CONFIDENCE ON TAP

Looking ahead, a monthly statistical bulletin from API will help inform evolving crude oil supply and demand expectations. The competing influence of re-imposed sanctions on Iran, the dialing back of the OPEC-led production cut scheme and rising US output make for a tricky landscape. That imbues with market-moving potential any bit of news that seems to tilt the balance in favor of one catalyst versus the others.

Meanwhile, the University of Michigan gauge of US consumer confidence is expected to show that sentiment narrowly brightened in July. All else being equal, the outcome might have influenced Fed policy expectations and thereby gold prices. A spirited response seems unlikely this time around however as markets look ahead to the US central bank’s often-pivotal Economic Symposium next week in Jackson Hole, Wyoming.

As for sentiment trends, idling S&P 500 futures point to indecision. That might translate into a consolidative tone in the final hours of the trading week, with traders pouncing on the opportunity for respite after several days of breakneck volatility. Acute sensitivity to stray headline flow is likely to remain however, warning market participants against complacency.

GOLD TECHNICAL ANALYSIS